Stocks End Off Highs, but S&P, Nasdaq Log Gains for 5th Day

Stocks closed off their best levels Thursday, but the S&P and Nasdaq still managed to finish higher for the fifth-straight session as investors cheered a batch of better-than-expected earnings and an upbeat jobless claims report.

Stocks eased off their highs after Federal Reserve Chairman Ben Bernanke said vulnerabilities remain in markets and regulators must be vigilant, speaking at a meeting of the panel of regulators known as the Financial Stability Oversight Council.

Around the same time, traders reacted to news that Germany's Bundesbank rejected the outright monetary transactions (OMT) program again.

"We're approaching unchartered territory for stocks again as we push toward another all-time high...people are cautious, a little indecisive, and risk is greater to the downside," said Keith Bliss, senior vice president at Cuttone & Co.

The S&P 500 climbed 6.37 points to close at 1,585.16. The Nasdaq gained 20.33 points, to finish at 3,289.99. Both the S&P 500 and Nasdaq logged a five-day rally, posting their best win streaks since last November.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded above 13.

Among key S&P sectors, telecoms and materials led the gainers, while energy slipped.

The CBOE is open again after a big problem this morning. Jon Najarian, OptionMonster.com, weighs in.

"Earnings have been ok – this momentum just shows you the strength of the bulls, driven by Uncle Ben (Bernanke)," said Uri Landesman, president of Platinum Partners, referring to the Federal Reserve's bond-buying program. "When the Fed's pump gets taken out of the mouth of the balloon, that's when it will pop or fly around the room. We have yet to see the correction, which will probably happen between now and the end of October."

So far, just about a half of S&P 500 companies have reported quarterly results this quarter, with 68 percent of firms posting earnings that have beat estimates, according to the latest data from Thomson Reuters. If all remaining companies report earnings in line with estimates, earnings will be up 3.6 percent from last year's first quarter.

Meanwhile, only 41 percent of companies have beaten their revenue expectations.

The Chicago Board Options Exchange reopened trading on all its products at 1pm ET after a system outage. Trading in options on the S&P 500 index and the CBOE volatility index were among those affected.

"As we enter this high-speed algo-model-type of world that we're in, things just happen quicker and faster," said Brian Stutland, managing member at Stuland Volatility Group. "We even saw the in the [AP Twitter] hack attack [on Tuesday]–Vix futures moving 10 percent up and down within 4 minutes—the guys on the floor didn't even get a chance to react to such movements. So some of these issues we need to take step by step in how fast we're advancing in this area of trading."

On the economic front, jobless claims declined 16,000 last week to a seasonally adjusted 339,000, according to the Labor Department. Analysts had expected 351,000 new claims last week, according to a Reuters poll.